Climate Change Landscape - Renewable and EV Companies Can Be the Beneficiaries

Oct 29, 2019 AEDT

Team Kalkine

Climate and environmental change are majorly a consequence of human inference on natural ecological processes, the most common of which is the industrial revolution. The balance between incoming and outgoing energy has been disturbed and has bothered the globe by winds, ocean currents and other mechanisms. Energy, today, is considered vital to attain development goals, in order to support an expanding economy, to bring electricity to countryside, to fuel the demand for greater mobility and to develop the infrastructure needs.

It has become a growing danger to the ecosystem and this quick change is making it problematic for species to adjust to the changes in temperature and has affected the life on Earth. However, the renewable and EV companies can benefit the environment as it can help generating the energy which doesn’t yield the greenhouse effect and reduce some type of pollution with an overall positive impact on the natural environment. Renewable energy technologies use conventional resources such as - sunshine, wind, tides, and biomass, from the environment to generate power. Renewable resources won’t run out, which cannot be said for many types of fossil fuels. Fossil Fuels, however, will be increasingly difficult to obtain, likely driving up both the cost and environmental impact of extraction.

Renewable energy has wider benefits for the community.

Renewable Energy is Clean and Green: Renewable energy originates from clean, green sources and release trifling to zero greenhouse releases, helping to slow global warming and keep the environment disinfectant and cleaner for elongated time period.

Helps to Improve Public Health: Cleaner air helps to save lives, specifically for someillnesses such as lung disease, heart disease, respiratory conditions and even some cancers. To soothe the greenhouse effect and improve the quality of the air, less release of such air is vital.

The benefits of renewable energy are of course twofold. Businesses can avail them by moving to more sustainable energy sources.

Consistently Lower Energy Bills: Energy resources like Natural gas and petroleum are expected to generate a high bill due to their lower availability in the market., On the other hand, use of Solar energy gives an opportunity to not only reduce e energy bills but also contribute to the Earth’s health. While investment in Solar energy may be large, a company may save a huge money on energy bills, maintenance fees and repairs.

Public Relation Boost: The customers and clients always want to be sure that their well-being is taken care of by businesses. One way of doing this is by providing them the best quality products and services and the other is to align the business needs with the environment. Going green is a prodigious way to get public relations enhancement. During a time when a smallest positive impact on the environment is important, businesses can advantage themselves with a new range of synergies from environment boost.

Let us now have a glance at how Renewable energy stocks are performing!

Genesis Energy Limited (ASX: GNE) is a New Zealand energy company which sells electricity, reticulated natural gas and LPG through its retail brands of Genesis Energy and Energy Online and is New Zealand’s largest energy retailer, engaged in electricity generation and electricity retailing

Dividend/Distribution – GNE and Final Dividend DRP Strike Price:

The company declared a dividend of $0.0925 per share on GNE - ORDINARY FULLY PAID FOREIGN EXEMPT NZX which is to be paid on 31 October 2019 and also announced that the issue price for shares issued in lieu of cash for the 2019 Final Dividend under its Dividend Reinvestment Plan is NZ$3.2619 per share.

Enabled a more sustainable future:

Genesis has enabled a more sustainable future and has cared for the environment as there were 143% increase in Whio and 714 pairs of these were protected. The company also aims to power New Zealand through 450 GWh per annum from 2021 through Waipipi wind farms which will offset 250,000 carbon. Producing a steady supply of New Zealand Unit carbon credits is the company’s primary objective.

Stock Performance: The stock of Genesis ended the day at $3.000 on 29 October 2019, which is very close to its 52-week high of $3.470, earning a dividend yield of 5.1%.

Infigen Energy (ASX: IFN) is a leading participant to a clean energy future. It generates and sources energy, adds value by firming and provides customers with reliable clean energy.

September 2019 monthly production:

During September 2019, Production Sold from the Smithfield OCGT was 5GWh. 25MW/52MWh battery at Lake Bonney, South Australia, achieved energisation and full AEMO registration in early October 2019 and is expected to be fully commissioned in H1FY20.

Dividend/Distribution – IFN:

Infigen Energy declared a dividend of 1 cent per share on IFN - FULLY PAID ORDINARY/UNITS STAPLED SECURITIES which was paid on 27 September 2019.

Strategic Implementation

During the FY ended on 30 June 2019, Underlying EBITDA went up by 11% to $165.3 million which was mainly driven by higher Renewable Energy Generation @ 1775GWh in FY19 as compared to 1480GWh in FY18.

The Company had 670 MW Owned Generation, 89 MW Contracted Generation and 268MW Fast Start Firming Capacity. The company has an aim to increase Renewable Energy Generation Capacity by an additional 600-700MW and is targeting carbon neutrality by 2025.

Renewable Energy Generation (Source: Company’s Reports)

Outlook

Infigen expects Renewable Energy Generation to be higher reflecting full year contributions from Bodangora Wind Farm and Kiata Wind Farm. Based on existing contracts, in FY20 Infigen expects 45% of its Renewable Energy Generation to be sold to C&I customers at approximately $80/MWh with a further 30% expected to be sold via PPA at approximately $50/MWh.

FY20 is underpinned by contracted sales of Electricity and LGCs and a capital structure and asset base which supports Volume and Contracted Sales Growth. The company expects to increase renewable Energy Generation sales in FY20 to 1,900 GWh with improvement in Quality and Reliability of Revenue.

The company also anticipates having a stable cost structure given business capability expansion in prior years.

Infigen expects its FY20 capitalized development costs to range between $6-8 million and wind farm capital expenditure to lie in between $2-4 million.

Stock Performance: The stock of Infigen ended the day at $0.655 on 29 October 2019 which is very close to its 52-week high of $0.700, earning a dividend yield of 1.54%.

Disclaimer

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